The One Thing All Credit Unions Have In Common

April 4, 2022 at 9:51 am Leave a comment

The one thing all credit unions have in common regardless of their size or where they are located is that they are struggling to hire and keep employees.  At least that seems to be the case anytime I’ve talked to a credit union or anyone in any business who is trying to find employees over the last several months.  The March unemployment statistics released on April 1st indicate that this trend is likely to continue for the foreseeable future and that inflation is likely to continue to impact your operations more than at any time since the early days of the Regan administration. 

The good news is that we are beginning to see the light at the end of the tunnel when it comes to covid’s impact on the economy.  According to the Department of Labor, while there are still 1.6 million fewer people employed than in February 2020, the employment rate for males is back to its pre-pandemic level, and there are some industries that are actually exceeding the 2020 employment.  Overall, the economy picked up 562,000 new jobs in the first quarter. 

But all this growth continues to come with pernicious consequences for employers.  Most importantly, “average hourly earnings of all employees on private nonfarm payrolls increased by 13 cents to $31.73 in March. Over the past 12 months, average hourly earnings have increased by 5.6 percent”.  In addition, the Wall Street Journal noted that the job market remains incredibly tight.  There are more job openings than unemployed people.  As a result, workers are quitting at record rates “leaving some companies short-staffed, at least temporarily”.  Sound familiar?

And of course inflation is continuing to impact your credit union, both operationally and as an employer.  While the 5.6% increase in wages is dramatic, it’s nowhere near the 8% inflation rate.  Which brings us back to the days of Paul Volcker who, as Chairman of the Federal Reserve in the late 70s and 80s, tamed inflation but only after high interest rates triggered a recession.  The latest numbers demonstrate that the Fed has no choice but to continue to raise interest rates.  Whether history is destined to repeat itself remains to be seen. 

Entry filed under: COVID-19, Economy. Tags: , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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